Oops I didn't notice you were using O gauge.
Have you tried the late Carl Arent's site? http://www.carendt.com/index.html The layouts are mostly smaller than you are planning, but a small one can be expanded. Ian Rice is another source of small layouts.

XtrackCAD runs on Windows, OSX and Linux. I'm running it in OSX. It isn't being developed at the moment, but still works well after a bit of learning how it works. It is worth spending a few hours trying out all the functions and options, the help is quite good. http://www.xtrkcad.org/Wikka/HomePage
There doesn't appear to be O scale track libraries, but you could do a 6' x 1' HO layout. Or you can make up your own turnouts, if you have some to measure you can enter the sizes into the turnout designer and it will make them as new turnouts.

Do you have space to put a thin fiddle yard off one end? It can just a plain bit of timber no scenery, even curved around to fit in the room. That would give more operation and help with a longer run around loop. If a couple of tracks would fit, even better.
If I did a small layout it would probably be an urban/industrial setting with tracks between and through buildings, such as Lance Mindheim and others. A couple of SW1500 or similar, fully sound fitted for power. Putting the loop diagonally would give a bit more length and make it easier take a small fiddle yard off a front corner.
Tall buildings look better in small areas than open countryside as they act as a view block and give a excuse for "busy" trackwork.

I've tried to do an O scale plan. Note it is in HO at half size to make it O scale.

I've come to the conclusion that with that space I would stay with HO. I have small locos such as SW1500, MP15, GP15 and GP38-2 that run really well and sound great. With a layout at about chest height it would look good and 12' would make a good switching layout.

Yup. I'd agree with Mike. If the biggest issue is space, and you want a decent track plan to switch some cars on and maintain interest, I'd bite the bullet and change to HO. By hanging onto the O scale notion, it's completely compromising what you want to achieve. A couple of sound-equipped locos, twenty or so cars and five or six industries, using the same plan as above, but in HO and stretched out, would be great fun.

switcher1 wrote:The (run round) loop is where I tend to hit the lack of space problem, but want more than just an 'inglenook', I will need something operationally interesting. I'm still looking around at other ideas/options.

Hi Keith

You do not mention the size of your locos, if they are small switchers 14' should be OK for O (Many HO shunting layouts are only 7'). You are correct when you say the run round is the problem, but if you replace the turnout and headshunt at one end with a hidden Sector Plate (long enough to take the switcher and one car) something can be fitted in.

I think it also depends on what you want. The classic Time Saver would fit in if you wish to develop scenary and then play with you locos.